Managerial Regret and Inventory Pricing

• 成果类型: Article
• 署名作者: Li, Meng; Liu, Yan
• 署名单位: University of Houston System; University of Houston; Chinese Academy of Sciences; University of Science & Technology of China, CAS
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4073
• 发表日期: 2022
• 页码: 4398-4414
• 关键词: Keywords; revenue management; managerial bias; Decision Analysis; anticipated regret

摘要

In this paper, we study a regretful seller???s problem of selling a fixed number of goods over a finite and known time horizon. The seller engages in counterfactual thinking to compare her selected price with other forgone alternatives. If a forgone alternative (ex post) generates a better outcome than the selected one, then the seller experiences regret. We characterize the pricing decision of a regretful seller and find that, although regret leads the seller to set a price that is lower than that set by an unbiased seller, the regretful seller employs decision policies whose structure is similar to those of the unbiased seller: the price decreases with the remaining inventory and increases with the time-to-go. Interestingly, we find that the seller who has a greater number of goods does not necessarily receive greater revenue.